Real-Time Ad Spending Growing Faster Than Expected

eMarketer revises forecast up, RTB spend to grow 73.9% in 2013

Real time, automated digital ad buying is growing so fast, even the forecasts can't keep up.

Revising its forecast up from earlier this year, eMarketerreleased a new report today predicting advertisers would spend more on real-time bidded (RTB) advertising in 2013 than originally estimated. The report put the total U.S. RTB spending in 2013 at $3.34 billion, up from the $3.32 billion eMarketer predicted in June. If the growth matches eMarketer's expectations, RTB spending in the U.S. will increase by 73.9% over last year.

"The growth of ads bought using real-time bidding comes as more advertisers familiarize themselves with complex automated buying ecosystem, and seek to reach audiences through a more targeted, and -- in some cases -- cost-effective process," said eMarketer in a statement accompanying the revised forecast.

The news is less than reassuring for digital publishers. While spending on online display ads is expected to increase by 19% this year, RTB spending, according to eMarketer, is growing at over 70%. The more rapid RTB growth means more money going to tech middlemen rather than publisher pockets, a welcome development for the ad tech industry but likely not for content creators.

Moreover, it means advertisers are investing more in technologies that drive efficiency over premium ad placements.

In another unwelcome development for publishers, eMarketer's revision occurred primarily due to an unexpected surge in mobile spending. While some sellers of mobile inventory, such as Facebook and Pandora, have figured out how to make money from mobile, the majority of digital publishers are still trying to figure it out. As a result, the revised numbers are likely to leave many wondering why they can't crack the medium despite the increased dollars moving there.

Clark Fredricksen, an eMarketer vice president, said advertisers were increasing their spending on more lucrative custom and sponsored ads, but the growth of RTB far outpaced that increase. For most publishers, Mr. Fredricksen said, the rise of both mobile and RTB spending is not something to celebrate.

"It is a one two punch," he said.

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Alex Kantrowitz

Alex Kantrowitz covers the technology of marketing and advertising for Ad Age. His work has previously appeared in Forbes, Fortune, BuzzFeed and the Ithaca Journal. Follow him on Twitter at: @Kantrowitz.